The Dow is on track to fall for the fifth straight week and was flat in midday trade. It’s down about 1% for the week and more than 8.5% so far this year.
The S&P 500 and Nasdaq — which were down 0.4% and 1.2% Friday and on track to drop about 2% this week — have fared even worse in 2022. The S&P 500 is down 11% this year while the Nasdaq is off 17%.
There’s a lot for investors to worry about. Even before Russia invaded Ukraine, inflation concerns dominated headlines for months. Surging oil prices after the invasion have made the situation worse.
Meanwhile, traders are grappling with the likelihood that the Federal Reserve will start raising rates later this month. While rates should remain fairly low, rates have been at zero for the past two years — so any increase will lead to higher borrowing costs, which will make mortgages and more loans more expensive.
Investors fear the one-two punch of surging commodity prices and rising rates will lead to stagflation, the combination of slowing growth and runaway inflation.
Higher rates also will likely eat into profit growth. Strong earnings have helped boost the market, particularly for tech companies.
